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DECREE

AMENDING AND SUPPLEMENTING A NUMBER OF ARTICLES OF THE GOVERNMENT'S DECREE NO. 115/2005/ND-CP OF SEPTEMBER 05, 2005, ON THE MECHANISM OF AUTONOMY AND ACCOUNTABILITY OF PUBLIC SCIENCE AND TECHNOLOGY ORGANIZATIONS, AND THE GOVERNMENT'S DECREE NO. 80/2007/ND-CP OF MAY 19, 2007, ON SCIENCE AND TECHNOLOGY ENTERPRISES

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the June 9, 2000 Law on Science and Technology;

Pursuant to the November 29, 2005 Law on Enterprises;

At the proposal of the Minister of Science and Technology,

DECREES:

Article 1. To amend and supplement a number of articles of the Government's Decree No. 115/2005/ND-CP of September 5, 2005, on the mechanism of autonomy and accountability of public science and technology organizations, as follows:

1. To amend and supplement Article 4 as follows:

"Article 4. Form of organization and operation

1. Scientific research and technological development organizations and scientific and technological service organizations that can self-finance their regular operations may be organized and operate in either of the following forms:

a) Science and technology organizations that self-finance their regular operations (below referred to as self-financing organizations);

b) Science and technology enterprises.

2. Scientific research and technological development organizations and scientific and technological service organizations that are unable to self-finance their regular operations shall be organized and operate in either of the forms specified in Clause 1 of this Article or be merged or dissolved by the end of December 31, 2013, at the latest.

Science and technology organizations that conduct basic research, strategy and policy research or research and development of specialized econ-technical norms to serve state management work shall consolidate their organization and raise their operation effectiveness before December 31, 2011, in order to receive slate budget funds for their assigned regular operations.

4. Public scientific research and technological development organizations and scientific and technological service organizations established after the effective date of this Decree may receive state budget funds for their regular operations during their initial period under Clause 1, Article 7 of this Decree.

5. Science and technology organizations that implement the mechanism of autonomy and accountability under this Decree remain to be state science and technological non-business units (unless they are wholly transformed into science and technology enterprises)."

2. To amend and supplement Clause 1, Article 6 as follows:

"1. To produce and deal in goods and provide services in professional areas of science and technology organizations and other areas under law; to be granted business registration certificates and use the seal of public non-business unit for production and business activities)

3. To amend and supplement Clause 1, Article 7 as follows:

"1. State budget funds, including:

a) Funds for regular operations

Funds for regular operations, including salaries, wages and expenses for the operational apparatus of science and technology organizations, are specified as follows:

- For science and technology organizations defined in Clause 2. Article 4 of this Decree, these funds shall be allocated in a lump sum through December 31.2013;

- For science and technology organizations defined in Clause 3. Article 4 of this Decree, annual funds shall be allocated in a lump sum;

- For science and technology organizations defined in Clause 4, Article 4 of this Decree, annual funds shall be allocated in a lump sum for up to 4 years (or 6 years, for organizations under provincial-level People's Committees) from the date of their establishment. Competent agencies shall decide on the levels of to-be-allocated funds on the basis of approved schemes on establishment of science and technology organizations.

b) Funds for the performance of tasks, including:

- Function-based regular tasks assigned by competent agencies under establishment decisions or organization and operation charters or regulations of these organizations. Annually, science and technology organizations shall estimate funds for the performance of function-based regular tasks, including funds for regular operations. For science and technology organizations that are allocated funds for regular operations in a lump sum, the State will not include these funds in the funds allocated for the performance of these tasks;

- State scientific and technological tasks financed by state funds. Annually, science and technology organizations shall estimate funds for the performance of scientific and technological tasks to be selected, including funds for regular operations.

c) Capital construction investment capital; domestic capital for projects: and funds for the procurement of equipment and overhaul of fixed assets.

d) Other funds (if any)."

4. To amend and supplement the first paragraph, Clause 2, Article 8 as follows:

"2. Payment of salaries and wages

Science and technology organizations shall pay salaries and wages not lower than salaries and wages based on salary ranks and grades, posts and salary allowances (if any) prescribed by the State for cadres, civil servants and laborers in state organizations and non-business units. Depending on their financial results and employees' capacity and qualifications, the actual levels of salaries and wages may be higher than state-prescribed levels. Salaries and wages of contractual employees shall be agreed by employers and employees and indicated in contracts as a basis for payment of social and health insurance premiums, and included in pre-tax reasonable expenses of science and technology organizations."

5. To amend and supplement Clause 5, Article 9 as follows:

"5. To enjoy tax incentives, exemption and reduction like science and technology enterprises."

6. To amend and supplement Point a, Clause 1, Article 13 as follows:

"a) Heads of science and technology organizations shall elaborate organization and operation renovation projects (for those defined in Clauses 1 and 2. Article 4) or organization and operation consolidation projects (for those defined in Clause 3, Article 4) and submit them by the deadline specified in Clause 2 or 3 Article 4 of this Decree to competent state management agencies for approval."

7. To amend and supplement Article 16 as follows:

"Article 16. Responsibilities of the Ministry of Finance

The Ministry of Finance shall assume the prime responsibility for. and coordinate with the Ministry of Science and Technology in, elaborating and promulgating documents which:

1. Guide the estimation and allocation of funds for regular operations of science and technology organizations; guide the formulation of internal spending regulations, estimation and finalization of financial operations of science and technology organizations carrying out production, business and service activities.

2. Stipulate the allocation of funds for regular operations in a lump sum to science and technology organizations defined in Clause 3, Article 4 under Clause 1, Article 7 of this Decree.

3. Stipulate the allocation of state assets to science and technology organizations carrying out production, business and service activities for management: and the use of state assets for scientific research and production, business and service activities.

4. Stipulate the contents, norms and procedures for fund allocation under Points a and b. Clause 1, Article 7 of this Decree."

8. To amend and supplement Clause 2, Article 17 as follows:

"2. To classify attached science and technology organizations under the guidance of the Ministry of Science and Technology; to direct attached science and technology organizations in implementing this Decree; to approve schemes of attached science and technology organizations defined in Clauses 1, 2 and 3, Article 4 of this Decree, and urge and examine the implementation of these schemes;"

9. To add the following Clause 4 to Article 17:

"4. To concentrate development investment in attached science and technology organizations in the course of implementing the mechanism of autonomy and accountability, especially those attached to provincial-level People's Committees."

Article 2. To amend and supplement a number of articles of the Government's Decree No. 80/2007/ND-CP of May 19, 2007, on science and technology enterprises, as follows:

1. To amend and supplement the second paragraph, Article 2 as follows:

"Major activities of science and technology enterprises arc to produce and deal in products and commodities turned out from scientific research and technological development outcomes they arc entitled to lawfully own and use; and to perform scientific and technological tasks. Science and technology enterprises shall produce and deal in other products and commodities and provide other services under law."

2. To add the following Clause 5 to Article 8:

"If satisfying all the prescribed conditions, enterprises established before the effective date of this Decree may obtain science and technology enterprise certificates and enjoy incentives for science and technology enterprises."

3. To amend and supplement Clause 2, Article 10 as follows:

"2. To enjoy enterprise income tax exemption or reduction like enterprises newly established from hi-tech, scientific research and technological development investment projects after they generate tax-liable incomes provided that turnover from products and commodities generated from scientific and technological outcomes in the first, second and third years accounts for 30%, 50% and 70% or more, respectively, of total turnover of the science and technology enterprise.

Science and technology enterprises are not entitled to enterprise income tax exemption or reduction in a fiscal year in which they fail to satisfy the above condition on turnover."

4. To add the following Clause 9 to Article 10:

"9. In addition to other forms of land allocation and lease under law. science and technology enterprises may select to use land in either of the following forms:

a) Leasing land free of rent;

b) Receiving land allocated free of land use levy.

When the Investment Law and other legal documents offer higher incentives for science and technology enterprises than those specified in this Decree, these enterprises are entitled to such higher incentives."

5. To amend and supplement Clause 3, Article 11 as follows:

"Cadres and employees of public science and technology organizations who have signed indefinite work or labor contracts may continue to sign labor contracts when working in science and technology enterprises and enjoy salaries based on the enterprises' salary ranks and grades with salary coefficients equal to or immediately higher than the salary coefficients they enjoyed before working in science and technology enterprises. Cadres and employees may enjoy their salary coefficients for up to 18 months after they move to work in science and technology enterprises if their salaries in these enterprises are lower than salaries they enjoyed in science and technology organizations. After this time limit, their salaries will be re-arranged based on salary grades and tables applicable to the enterprises."

Article 3.

1. This Decree takes effect on November 6, 2010.

2. The Minister of Science and Technology shall organize the implementation of this Decree.

3. Ministers, heads of ministerial-level agencies, heads of government-attached agencies and chairpersons of provincial-level People's Committees shall implement this Decree.